Dr Allen Nazeri DDS MBAHealthcare M&A Expert

Your Business Lost Money? Buyers May Still Want It #mergersandacquisitions #exitstrategy #learning

14 May 2026 · 1 min

Watch on YouTube

1:19

In this concise advisory clip, Dr. Allen Nazeri, Managing Partner at Prime Exits, explains why a company’s historical losses do not automatically make it unattractive in mergers and acquisitions. He introduces the concept of net operating loss (NOL) carryforwards, describing how past losses can be applied against future taxable income, reducing taxes and improving cash flow for a new owner. Using a $20 million loss example, he illustrates the potential tax savings when a buyer turns the business profitable. Nazeri cautions that not every loss-making firm is valuable, noting IRS Section 382 limits on the usability of NOLs after an acquisition. He emphasizes that sophisticated buyers also evaluate customers, contracts, technology, market share, synergies, and recurring revenue, focusing on the future potential of the business rather than past performance. The segment ends with a call to follow for more practical M&A insights.

Chapters

A lot of founders think, "My company lost money and nobody will want it." That's not always true. In M&A, some buyers actually look for businesses with historical losses because of something called a loss carry forward, or NOL, net operating loss. Here's how it works. If a company loses money today, those losses may be carried forward into future years to offset future profits, meaning less taxable income, lower taxes, and better cash flow. Example: Future taxable income equals future profit minus prior loss carryforward. So imagine a company lost $20 million in the past, but a new owner turns it profitable. Those old losses may reduce future taxes by millions. Now, this does not mean every money-losing company is valuable. Buyers still care about customers, contracts, technology, market share, synergies, and recurring revenue. And there are IRS limitations under Section 382 that restrict how much of those losses can be used after an acquisition. But sophisticated buyers don't just look at "What did this company do yesterday?" They ask, "What can this company become under our ownership?" I'm Dr Allen Nazeri, Managing Partner at Prime Exits. If you're wondering what your company is really worth, even if profits are inconsistent, follow me for more real-world M&A insights.